PROBLEM 7 On January 1, 2021, Jonathan Company sold a tract of land that was acquired several years ago for P1,800,000. Jonathan received a three-year, non-interest bearing note for P6,000,000 in exchange for the land. There is no readily available market value for the land, but the current market rate of interest for comparable notes is 15%. Present value of P1 for three periods at 15% is 0.6575. Present value of an annuity of PI for three periods at 15% is 2.2832. explain the amount of the interest revenue recognized in Jonathan's profit or loss.

PROBLEM 7 On January 1, 2021, Jonathan Company sold a tract of land that was acquired several years ago for P1,800,000. Jonathan received a three-year, non-interest bearing note for P6,000,000 in exchange for the land. There is no readily available market value for the land, but the current market rate of interest for comparable notes is 15%. Present value of P1 for three periods at 15% is 0.6575. Present value of an annuity of PI for three periods at 15% is 2.2832. explain the amount of the interest revenue recognized in Jonathan's profit or loss.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Question 11 Cookie Ltd. receives a four-year, $100,000, zero-interest-bearing note. The present value of this note is $82,270. Interest income to be recognized for calendar 2021 will be O $8,227.00. O $10,000. O $7,910.75. O$4,319.18.
On January 1, 2020, Physanto Corp. received in exchange for equipment sold to Viva Inc., an 8% $500,000 note that matures in January 2024. The market rate of interest for similar notes is 12%. Interest is received semi-annually each July 1 and January 1. Round all values to the nearest whole number. Required: A. Complete the partial amortization schedule provided. Place zero in any field that does not require a computed value.
9
16. On January 1, 2012, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2012. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%. What is the interest expense for the year ending December 31, 2012? * a. P360,000 b. P288,000 c. P240,000 d. P168,000
4
5
57. On April 1, 2028, A Company issued a P 9,000,000 non-interest-bearing note due March 31, 2031, for a piece of land with a cash price of P 6,949,800. Effective interest rate is 9%. Determine the interest expense for the year ended December 31, 2028 Round off final answer to the nearest peso.
Impairment of zero-interest notes receivable, GAAP vs. IFRS On December 31, 2020, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest note. The note was issued to yield 10% interest. Unfortunately, during 2022, Firth began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would collect only $75,000 at maturity. The market rate of interest on loans of this nature is now 11%. 1,Instructions: On March 31, 2023, Paris learns that Firth will be able to repay the loan under the original terms. Paris Bank uses IFRS. Prepare the journal entry to be recorded on March 31, 2023, if any. Answer within 45mins.it would be really helpful!
7
Please provide complete solutions. Thank you
[4 points] Omega Corporation had installment sales of $2,000,000 and cost of installment sales of $1,400,000 in 2019. A 2019 sale resulted in a default in 2021, at which time the balance of the installment receivable was $60,000. The repossessed merchandise had a fair value of $30,000. a. Calculate the rate of gross profit on 2019 installment sales. b. Make the entry to record the repossession.